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PFRDA looking at ways for minors to open an account under NPS

PFRDA (Pension Fund Regulatory and Development Authority) is looking at ways for the minors to be able to open an account under the National Pension Scheme (NPS). The authority will also scrutinize the legal procedures and examine the legal aspects which are associated with the matter.

 

On the matter, Hemant Contractor, Chairman of PFRDA said

We are looking at the possibility of allowing minors to join NPS because in some countries it is allowed. So we are looking at that issue.

He also added that there are legal procedures involved for allowing minors to open such an account is concerned and the PFRDA is looking at ways to sort it out.

There are legal issues like a minor’s capacity to enter a contract. Under the law, minors cannot enter into a contract. Another issue is whether they can discharge their responsibility under the contract. So we are trying to find out how to get around those issues.

When asked about the time – span needed to have some light on the matter he said, PFRDA will forward this matter to the finance ministry once the internal discussion is done.

Further, he said 

We are looking at it very closely at it very closely, maybe in 2 – 3 weeks something concrete may come up.

National Pension Scheme or NPS is a contribution pension scheme which is administered and regulated by the Pension Fund Regulatory and Development Authority (PFRDA) which is a body created by an act of Parliament. This scheme offers a large variety of investment options to its employees. And the main objective of the scheme is to lower the liabilities of the Government of India with regards to total pension as well as to ensure that the country’s citizens would earn a stable income following their retirement along with helping them earn decent returns on their investments.

And NPS is designed for the government as well as the private sector employee. And on the other hand, APY (Atal Pension Yojana) mainly caters to those belongs to the unorganized sector.

According to the sources, the complete subscriber base of the pension regulator was 1.81 crore as on 31st October this year. And there were 1.54 crore subscribers at the end of the fiscal ended March 2017.